NEW YORK (CNN/Money) -
Dinner's over and your friend breaks out the plastic. Don't get excited. He's not paying for you. He just wants to get more miles on his credit card.
Note to self: Find more generous friend and get card with perks.
There's certainly no shortage -- of cards with perks, that is. There are so many, in fact, you'll have to do some digging -- and yes, some math -- to get past the hype and find the best bottom-line offer for your spending habits.
If you pay off your balance in full each month and don't mind a little busywork when it comes to reaping your rewards, there are certainly good deals to be had.
But "there's a lot of fine print on these offers. And it varies quite a bit from card to card," said Curtis Arnold, founder of the consumer advocacy site CardRatings.com, which offers consumers a platform to review their credit cards.
To help you through the maze, here are a few tips.
Don't think love is free. Cards with rewards often come with annual fees -- anywhere from $20 to $150 or more. And they often come with higher annual percentage rates (APRs). In fact, generally speaking, cards with perks charge up to 6 percentage points more, said Robert McKinley, founder of credit card industry tracker CardWeb.com.
Translation: If you carry a balance, you may be better off skipping souped-up cards altogether and opting for a low-rate card instead. So what if you get 1 percent cash-back when you're paying 20 percent on your balance? "No matter how you do the math, it's not worth it," said Peter Flur, founder of the consumer advocacy site Credit Card Goodies.com.
A possible exception is if you get a low-fee or no-fee rewards card with a limited time 0-percent transfer offer. To make it work, though, you should be able to pay off your balance in full before the 0-percent rate expires and not carry a balance after that.
Know thyself. You've probably never met a dollar you couldn't spend. But you can't say the same for discounts at FTD.com or free gas at a station 50 miles from home. No matter how generous a rewards program, if it only applies to products or vendors you rarely use, keep looking.
And if you only charge $5,000 or $6,000 a year on a card, it may take you a few years to earn a free roundtrip airline ticket. "By the time you add up the fees, you may have more than paid for the ticket," McKinley said.
Understand what "up to" means. For some, cash back is the best perk. But in order to compare deals you must understand them first. Some cards offer a flat 1 percent rebate on your purchases, but most specify you can earn "up to" a certain percentage of your purchases -- typically 2 percent. That means they use a tiered system. And some cards will offer the best rebates only if you shop at selected vendors.
For example, the Discover Card's "up to 2 percent cash back bonus award" program offers 0.25 percent on your first $1,500 of purchases in a given year; 0.5 percent on the next $1,500 and then 1 percent on all purchases over $3,000. But that's only "up to 1 percent." To receive "up to 2 percent" you'll need to redeem your cash-back award in the form of coupons that you use at one of Discover Card's merchant partners (e.g., Blockbuster, Staples). Those partners will double the value of that coupon when you make a purchase. (You also have the option of asking the company to simply send you a check for the cash-back you've already earned.)
Of course, money back is always welcome, as are double coupons. But if you have to shop at specific merchants to maximize your benefits on a card, be sure the card's partners are ones that you frequent.
Remember, a cap is NOT a free hat. Now that you've mastered the "up to" principle, add this wrench to the works. Some cards cap how much you can receive in rebates. So, for example, you may receive cash back up to 2 percent of your purchases or $500, whichever is less.
Depending on how much you're going to spend, a card with tiered rebates and a cap may be better than one with just a flat rate, Flur said. For example, if you're going to spend $34,000 on a card you might be better off using a card that offers up to a 2 percent rebate capped at $500 ($500 is 1.5 percent of $34,000) than you would with a 1 percent flat rebate ($340).
Don't stockpile points for long. You may be planning a trip around the world in three years and counting on free miles to smooth your way. But, said McKinley, "don't think long-term on the perks." Perks programs can be changed or terminated at any time, and sometimes the airlines may impose an expiration date on the redemption of your miles.
Forget what your shrink says. Aim for perfection. There are many reasons not to pay your bill late or skip a payment -- your credit score chief among them. But a poor payment history also can reduce your rewards significantly. Either the late fees you're charged will negate much of your payback, or "they can hold your points hostage if your account goes into delinquency," McKinley said.
Other ways to save
If you're not into shopping for rewards, there are other ways to save.
For instance, if you're currently paying an annual fee for your card but are not receiving perks, switch to an equally low-rate, no-fee card. There are plenty out there.
And second, check the card incentives section of CardWeb.com periodically to see what limited time offers may be available to you on the cards you already have.
For instance, through Dec. 31, if you use your MasterCard you will receive a one-time 20 percent discount on a purchase from kennethcole.com. Visa cardholders, meanwhile, will receive a one-time $20 discount off any purchase over $80 from eddiebauer.com through Oct. 31. If you're an American Express Business Cardmember, Kinko's will give you 10 percent discount on qualifying purchases and you'll receive double membership rewards points through Nov. 30.